India's largest winery expects to hit almost ₹100 crore in wine tourism this year

After six straight quarters of double-digit growth, India's largest winery Sula Vineyards saw a slowdown with only a 4% year-on-year rise in revenue in the October to December 2023 period.

"There's been a little bit of a pause in the market, the market has been a bit soft. The third quarter was a bit soft in terms of FMCG as well as wine. But, I am happy to say that the fourth quarter is looking like it's going to go back to the trend. Those are the early signs,” Rajeev Samant, MD and CEO, told CNBC-TV18 in a post-earnings chat on February 14.

Sula Vineyards’ wine segment, which houses premium brands such as Dindori and Rasa, reported a nearly 4% rise in revenue during the quarter. This is Sula's biggest segment and accounts for 89% of the top line.

Sula is a premiumisation story, Samant said, adding that once again, the firm’s volume growth of elite and premium wines has been much higher than its economy and popular ones.

“It is really where the profits are, where we stand alone and unchallenged, and that is the ₹1,000 to around ₹1,500 space, where none of the other domestic players can compete with us…With no imported wines in this category, we have a 75% market share of the domestic wine space,” he said.

Sula Vineyards’ smaller wine tourism segment, logged a 16% rise in revenue as more people visited the company's vineyards, located in the cities of Nashik and Bengaluru, especially over the long Christmas weekend.

The company is looking to end the year up at about ₹97-98 crore. “We were hoping to hit ₹100 crore but it's been extremely strong and it continues even in Q4. So we have had just record-breaking days, one after the other,” the CEO added.

Reflecting on the wine tourism outlook, Samant said the firm has several new projects on the anvil and hopes to make related announcements soon. “The sky’s the limit for wine tourism because there's such little on offer. Sula is the only player in town and we have the potential to do much more.”

Samant also said that the company is awaiting the fine print of the Maharashtra government’s wine industrial promotion scheme. While details are still awaited, he asserted that as Sula is the largest producer, it would be proportionately the largest beneficiary of the scheme